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Year-end, big-ticket sales and your local economy

December 17, 2013

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In 2008, this couple was thrilled to get a tax rebate, which went toward a washer and dryer. Photo: John Carleton

Retail stories this time of year tend to focus on items that fit under the tree, like electronics, apparel, jewelry, gift cards.

But year-end sales of durable goods like cars, furniture and appliances — while not as glitzy as new iPads and cashmere scarves — can show a different side of your region’s economy.  If you’re looking for a year-end angle or a contrarian retail story, consider checking in with durable goods sellers like auto retailers, appliance stores and furniture showrooms for their take on 2013 and the outlook for the coming year.  As this just-out report on U.S. factory output notes, demand for furniture and the like is a bellwether of other major economic sectors like the housing market; perhaps you can discern local trends.

You could also whip up a consumer piece aimed at bargain-hunters, at least as a sidebar; here’s an example from The Christian Science Monitor, “Six things not to buy before Christmas,”  that focuses on traditional discounts in the week leading up to Jan. 1. And here’s a MarketWatch story about why New Year’s Eve is the best day of the year to buy a new car.

But I’d be more interested in what merchants and business people are saying and doing, and what they think t heir lingering year-end inventory says about consumer purchasing trends, the jobs market and the local economy.  And you can go beyond companies that sell to consumers;  how are wholesalers faring?  Or sellers of business products like construction machinery, office equipment and furnishings, restaurant supplies and more?

Start with cars; auto dealers have enjoyed a fantastic year with the best annualized sales pace since early 2007 — and the outlook for 2014 is excellent, with some analysts forecasting expansion in domestic auto sales for several years to come.   Who are your local dealers’ best customers these days — pension-flush Boomers?  Small firms like plumbing companies augmenting their fleets?  Growing young families seeking crossover SUVs or vans?   What’s financing been like; are sub-prime borrowers appearing more frequently?  How about used-car prices and sales; are they sinking in response to brisker demand for new vehicles?  And on the opposite end of the spectrum, how do luxury car dealers fare? And what does all of this mean for capital improvements and employment at dealerships?

Other durable-goods retailers can provide insight into the local jobs, housing and financing markets through the prism of furniture sales, mattress sales, appliance sales, and demand for upgrades like privacy fencing.  This blog post from the trade publication Furniture World, for example, says September sales were up 4 percent year over year and gained 12 percent over August, with year-to-date sales up 6 percent over the first three quarters of 2012.  Similarly, Appliance Magazine offers some fascinating industry insight (global vacuuming trends?) including monthly sales reports; they’re subscription-based but you might ask the editors to share data — which in the October edition also includes information about restaurant equipment.

Stocking-stuffer retail stories are fun and highlight consumer behavior, but taking a year-end look at big-money purchases by households and small business may point you to trends for 2014 and an interesting year-end snapshot of your market’s economy.


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